HOUSTON--(BUSINESS WIRE)--Apr. 26, 2017--
Waste Management, Inc. (NYSE: WM) today announced financial results for
its quarter ended March 31, 2017. Revenues for the first quarter of 2017
were $3.44 billion compared with $3.18 billion for the same 2016 period.
Net incomefor the quarter was $298 million, or $0.67 per
diluted share, compared with $258 million, or $0.58 per diluted share,
for the first quarter of 2016.(a) On an as-adjusted basis,
excluding certain items, net income was $291 million, or $0.66 per
diluted share, in the first quarter of 2017.(b)

The Company’s as-adjusted first quarter 2017 results exclude a $0.07 per
diluted share tax benefit related to equity-based compensation and a
non-cash charge of $0.06 per diluted share related to the impairment of
an equity investment in a waste diversion technology company.

Jim Fish, President and Chief Executive Officer of Waste Management,
commented, “We are pleased with our strong first quarter results, as we
met or exceeded all of our internal targets. On an as-adjusted basis, we
saw earnings growth of almost 14%.(b) Operating EBITDA grew
8.0% due to strength in both our traditional solid waste business and
our recycling business, which in turn drove strong first quarter cash
flows.(c) This performance led to us exceeding our internal
targets for operating EBITDA and free cash flow.”(b)

KEY HIGHLIGHTS FOR THE FIRST QUARTER 2017

Overall revenue increased by 8.3%, or $264 million. The revenue
increase was driven by positive yield and volume in the Company’s
collection and disposal business, which contributed $113 million to
revenue growth, and significantly higher recycling commodity prices,
which contributed $111 million of revenue growth.

Core price, which consists of price increases net of rollbacks, plus
fees other than the Company’s fuel surcharge, was 5.1%.(d)

Internal revenue growth from yield for collection and disposal
operations was 2.0%.

For both the total Company and the traditional solid waste business,
internal revenue growth from volume was positive 1.9% in the first
quarter of 2017, or 1.4% after adjusting for one additional workday in
the current quarter.

Average recycling commodity prices at the Company’s recycling
facilities were almost 70% higher in the first quarter of 2017 than in
the prior year period. Results in the Company’s recycling line of
business improved by $0.066 per diluted share when compared to the
prior year period.

As a percent of revenue, operating expenses were 63.0% in the first
quarter of 2017, as compared to 62.8% in the first quarter of 2016.
Increased recycling commodity rebates and fuel costs drove the
increase in operating expenses as a percent of revenue. Fuel costs
were a negative $0.02 per diluted share when compared to the prior
year period.

As a percent of revenue, SG&A expenses were 11.3% in the first quarter
of 2017, which is a 10 basis point improvement when compared to the
first quarter of 2016. First quarter 2017 SG&A expenses include a
negative $0.02 per diluted share impact related to executive severance.

Net cash provided by operating activities was $721 million, compared
to $732 million in the first quarter of 2016. The first quarter of
2016 included a $67 million benefit from terminating a cross-currency
hedge.

Capital expenditures were $332 million, an increase of $15 million
compared to 2016.

Free cash flow was $396 million in the first quarter of 2017, compared
to $428 million in the first quarter of 2016.(b)

The Company returned $194 million to shareholders during the first
quarter in dividends.

The effective tax rate was approximately 31.7%. Adjusting for the
items noted in the Company’s as-adjusted earnings, the tax rate would
have been approximately 36.8%.(b)

Fish concluded, “Our strong start to 2017 gives us early confidence that
we are on track to meet our full-year 2017 guidance of adjusted earnings
per diluted share of between $3.14 and $3.18 and free cash flow of
between $1.5 and $1.6 billion.(b) As in previous years, we
will wait to see the extent of the anticipated seasonal upturn in our
business before reevaluating our guidance. Our employees have continued
to deliver strong performance, and the first quarter sets us up for
another successful year.”

(a) For purposes of this press release, all references to “Net
income” refer to the financial statement line items “Net income
attributable to Waste Management, Inc.”.

(b) This press release contains a discussion of non-GAAP measures,
as defined in Regulation G of the Securities Exchange Act of 1934, as
amended. The Company reports its financial results in compliance with
GAAP, but believes that also discussing non-GAAP measures provides
investors with (i) additional, meaningful comparisons of current results
to prior periods’ results by excluding items that the Company does not
believe reflect its fundamental business performance and are not
representative or indicative of its results of operations and (ii)
financial measures the Company uses in the management of its business.
Accordingly, net income, earnings per diluted share, earnings growth,
and the effective tax rate for the first quarter of 2017 have been
presented in certain instances excluding items identified in the
reconciliations provided.

The Company’s projected full-year 2017 earnings per diluted share
is not based on GAAP net earnings per diluted share and are anticipated
to be adjusted to exclude the effects of events or circumstances in 2017
that are not representative or indicative of the Company’s results of
operations, including the items excluded from our as-adjusted first
quarter results. Projected GAAP earnings per diluted share for the full
year would require inclusion of the projected impact of future excluded
items, including items that are not currently determinable, but may be
significant, such as asset impairments and one-time items, charges,
gains or losses from divestitures or litigation, or other items. Due to
the uncertainty of the likelihood, amount and timing of any such items,
the Company does not have information available to provide a
quantitative reconciliation of adjusted projected full year earnings per
diluted share to a GAAP earnings per diluted share projection.

The Company also discusses free cash flow and provides a projection
of free cash flow. Free cash flow is a non-GAAP measure. The Company
discusses free cash flow because the Company believes that it is
indicative of its ability to pay its quarterly dividends, repurchase
common stock, fund acquisitions and other investments and, in the
absence of refinancings, to repay its debt obligations. Free cash flow
is not intended to replace “Net cash provided by operating activities,”
which is the most comparable U.S. GAAP measure. However, the Company
believes free cash flow gives investors useful insight into how the
Company views its liquidity. Nevertheless, the use of free cash flow as
a liquidity measure has material limitations because it excludes certain
expenditures that are required or that the Company has committed to,
such as declared dividend payments and debt service requirements. The
Company defines free cash flow as net cash provided by operating
activities, less capital expenditures, plus proceeds from divestitures
of businesses and other assets (net of cash divested); this definition
may not be comparable to similarly titled measures reported by other
companies.

The quantitative reconciliations of non-GAAP measures used herein
to the most comparable GAAP measures are included in the accompanying
schedules, with the exception of projected earnings per diluted share.
Non-GAAP measures should not be considered a substitute for financial
measures presented in accordance with GAAP, and investors are urged to
take into account GAAP measures as well as non-GAAP measures in
evaluating the Company.

(c) Management defines operating EBITDA as GAAP income from
operations before depreciation and amortization; this measure may not be
comparable to similarly titled measures reported by other companies.

(d) Core price is a performance metric used by management to
evaluate the effectiveness of the Company’s pricing strategies; it is
not derived from the Company’s financial statements and may not be
comparable to measures presented by other companies. Core price is based
on certain historical assumptions, which may differ from actual results,
to allow for comparability between reporting periods and to reveal
trends in results over time.

The Company will host a conference call at 10:00 AM (Eastern) today to
discuss the first quarter 2017 results. Information contained within
this press release will be referenced and should be considered in
conjunction with the call.

The conference call will be webcast live from the Investor Relations
section of Waste Management’s website www.wm.com.
To access the conference call by telephone, please dial (877) 710-6139
approximately 10 minutes prior to the scheduled start of the call. If
you are calling from outside of the United States or Canada, please dial
(706) 643-7398. Please utilize conference ID number 94449507 when
prompted by the conference call operator.

A replay of the conference call will be available on the Company’s
website www.wm.com
and by telephone from approximately 1:00 PM (Eastern) Wednesday, April
26, 2017 through 5:00 PM (Eastern) on Wednesday, May 10, 2017. To access
the replay telephonically, please dial (855) 859-2056, or from outside
of the United States or Canada dial (404) 537-3406, and use the replay
conference ID number 94449507.

The Company, from time to time, provides estimates of financial and
other data, comments on expectations relating to future periods and
makes statements of opinion, view or belief about current and future
events. This press release contains a number of such forward-looking
statements, including but not limited to statements regarding 2017
earnings per diluted share; 2017 free cash flow; and all statements
regarding future business performance and growth. You should view these
statements with caution. They are based on the facts and circumstances
known to the Company as of the date the statements are made. These
forward-looking statements are subject to risks and uncertainties that
could cause actual results to be materially different from those set
forth in such forward-looking statements, including but not limited to,
increased competition; pricing actions; failure to implement our
optimization, growth, and cost savings initiatives and overall business
strategy; failure to identify acquisition targets and negotiate
attractive terms; failure to consummate or integrate such acquisitions;
failure to obtain the results anticipated from acquisitions;
environmental and other regulations; commodity price fluctuations;
disposal alternatives and waste diversion; declining waste volumes;
failure to develop and protect new technology; significant environmental
or other incidents resulting in liabilities and brand damage; weakness
in economic conditions; failure to obtain and maintain necessary
permits; labor disruptions; impairment charges; and exposure to
litigation and governmental proceedings. Please also see the Company’s
filings with the SEC, including Part I, Item 1A of the Company’s most
recently filed Annual Report on Form 10-K, for additional information
regarding these and other risks and uncertainties applicable to our
business. The Company assumes no obligation to update any
forward-looking statement, including financial estimates and forecasts,
whether as a result of future events, circumstances or developments or
otherwise.

ABOUT WASTE MANAGEMENT

Waste Management, based in Houston, Texas, is the leading provider of
comprehensive waste management services in North America. Through its
subsidiaries, the company provides collection, transfer, recycling and
resource recovery, and disposal services. It is also a leading
developer, operator and owner of landfill gas-to-energy facilities in
the United States. The company’s customers include residential,
commercial, industrial, and municipal customers throughout North
America. To learn more information about Waste Management, visit www.wm.com
or www.thinkgreen.com.

Intercompany revenues between lines of business are eliminated
within the Condensed Consolidated Financial Statements included
herein.

(b)

The summary of free cash flows has been prepared to highlight and
facilitate understanding of the principal cash flow elements. Free
cash flow is not a measure of financial performance under
generally accepted accounting principles and is not intended to
replace the consolidated statement of cash flows that was prepared
in accordance with generally accepted accounting principles.

(c)

Prior year information has been revised to reflect the adoption of
ASU 2016-09 and conform to our current year presentation.

Represents amounts associated with business acquisitions
consummated during the indicated periods except for Cash paid for
acquisitions, which may include cash payments for business
acquisitions consummated in prior quarters.

(b)

The quarter ended March 31, 2017 as compared to the quarter ended
December 31, 2016 reflects an increase in amortization expense of
approximately $21.5 million, primarily due to changes in landfill
estimates identified in the prior quarter.

(c)

The quarter ended March 31, 2017 as compared to the quarter ended
March 31, 2016 reflects an increase in amortization expense of
approximately $14.9 million primarily due to increased volumes and
changes in landfill estimates identified in both quarters.

First quarter 2017 adjusted earnings per diluted share increased
13.8% as compared with first quarter 2016 as reported earnings per
diluted share of $0.58.

(b)

The Company calculates its effective tax rate based on actual
dollars. Rounding differences occurred when the effective tax rate
was calculated using Pre-tax Income and Tax Expense amounts included
in the table above, as these items have been rounded in millions.

First quarter 2017 as reported operating EBITDA increased $66
million, or 8.0%, as compared with the first quarter of 2016.

(b)

The reconciliation includes two scenarios that illustrate our
projected free cash flow range for 2017. The amounts used in the
reconciliation are subject to many variables, some of which are not
under our control and, therefore, are not necessarily indicative of
actual results.